Does the fine-structure in oxygen K-edge X-ray emission (Fuchs et al. Phys. Rev. Lett. 2008, 100, 027801) imply that liquid water is a two-component mixture or is it the signature of a transient OH species arising in the core-excitation process'? As with the interpretation of the X-ray absorption spectrum of liquid water, this question is also intensely discussed in the water and X-ray spectroscopy communities. X-ray emission is an independent probe of the electronic structure yielding complementary information on hydrogen bonding in liquid water. In this study, the angular anisotropy in the resonant inelastic soft X-ray scattering (resonant X-ray emission (XE)) spectrum of liquid water is simulated on the basis of ab initio molecular dynamics simulations to allow for direct comparison to recent experimental data (Forsberg et al. Phys. Rev. B 2009, 79, 132203.). Theoretical simulations unequivocally show that the difference in angular anisotropy in the water lone-pair features is related to their fundamentally different origin. The high emission-energy peak is primarily due to the contribution from the out-of-plane (1b(1)) lone-pair in intact water molecules. On the other hand, the low emission-energy lone-pair peak originates from the bonding (3a(1)) state and is assigned to a transient OH species formed by ultrafast (< 10 fs) photodissociation. The information in the XE spectrum on the structure of liquid water is limited and buried in features arising from excited state dynamics. In combination with available experimental data, the theoretical simulations settle a rising debate on the interpretation of resonant and nonresonant XE spectra of liquid water and there are strong implications for the XE spectroscopy of hydrogen-bonded liquids. The simulations show that the fine-structure in the XE spectrum of liquid water can be explained simply in terms of present day ab initio molecular dynamics simulations.